Hunter calls for review of border rail contract

MTS continues to stand by the deal with Pacific Imperial

The Metropolitan Transit System again reiterated its support for a company that has a 99-year lease to operate a potentially valuable freight rail line, a stance that led a local congressman to call for termination of the lease and a further investigation by federal authorities.

The war of words between the agency and Rep. Duncan Hunter, R-Alpine, came in a letter sent Tuesday to Hunter from MTS chief Paul Jablonski, responding to several questions Hunter had raised two weeks ago.

Jablonski deflected pointed questions from Hunter about the lease with the company, Pacific Imperial Railroad, and how MTS came to approve it, for the second time in a month. He also noted the agency’s board on July 17 conveyed support for the company and the quality of the lease.

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But Hunter spokesman Joe Kasper said the response was unconvincing. He said in a statement that the next steps would be to contact federal auditors and the inspector general for the Department of Transportation to look into the matter “to ensure the right light is shined on this situation.”

He added that “the only suitable outcome at this point is termination of the lease.”

The company has come under scrutiny in recent months as former executives have accused the ownership of fraud and mismanagement. Principals in the company have been involved in a string of bankruptcies, and have been named in 123 lawsuits over the years.

The lease is for the Desert Line, a stretch of track running from Campo to Imperial County that many see as a potentially key boost for the local economy — if it can ever be repaired enough to become fully operational.

Under the terms of a lease agreed to in 2012, the company must pay MTS $1 million per year in two installments. It also has to meet various performance goals and timelines linked to repairing the line and getting it running, or else face losing the lease.

The company’s most recent payment of $500,000 was due July 1. It was paid 10 days late.